Collateral Progress

Competition is good. In the long-term it usually results in a net positive for everybody. If there is a perfect example of this it’s likely the Annual Tech Startup Gold Rush™. For example:

2007: The Year of Microblogging — Twitter, Pownce.

2008: The Year of the Check-in — Foursquare, Gowalla.

2011: The Year of Group Messaging — GroupMe, Beluga.

Pownce. Gowalla. Beluga. All companies chasing the dream in their respective spaces that either shut down or otherwise ceased operating due to competition. And yet all completely necessary for their respective novel paradigms to survive. Even though they no longer exist, each added to our overall awareness of, and comfort with, a new paradigm.

Here’s how the Annual Tech Startup Gold Rush™ works: a company introduces a new paradigm. Others see opportunity and rush in. The paradigm catches on slowly, then faster, and new players bring in their own new consumers. The pool of overall consumers familiar with the paradigm grows larger. Most companies fail/pivot/shut down. Maybe the company that introduced the paradigm is still around, maybe not. It doesn’t matter. The paradigm itself persists on now self-sustaining momentum.

The paradigm reached this point only by all the companies contributing to its growth. Before this point the consumer pool was too small and thus too brittle; any one company failing could mean such a significant loss of consumers from the pool that the paradigm itself is at risk of fading. Now, however, the pool is big enough that when a company leaves the pool its customers don’t. Instead they migrate to another paradigm provider.

Often at this point another notable trend starts: major services adopt the paradigm into their products. Facebook is one of the best at this. Possibly the greatest example of this is when Twitter first introduced the paradigm of the short-burst status update. At the time Facebook had no similar feature. Yet eventually Twitter and others cemented the paradigm of status updating so dominantly that it was recognized as being as necessary as social networking itself. This is when Facebook adopted it.

Sometimes the paradigm author stays the predominant player, sometimes they don’t. Twitter is still around and doing quite well, despite Facebook adopting their core feature, but Pownce certainly isn’t. Yet Pownce necessarily validated microblogging as a thing worthy of more attention. It got more people to ask their friends what they thought of “this whole microblogging thing”. It was collateral progress.